An Employer with health and welfare benefit plans that have 100 or more participants on the 1st day of the plan year will have a Form 5500 filing deadline seven months after the end of the plan year. For calendar year plans, the deadline is July 31st, making July a big month for Form 5500 filings.
The Form 5500 is an ERISA requirement for all health and welfare plans subject to ERISA. Employers that sponsor insured plans and self-insured plans (such as the Health Care FSA and Health Reimbursement Arrangement (HRA)) only have filing requirements if they are large plans with 100 or more participants on the first date of the plan year, for each respective plan. Other component benefit plans that may require filing include plans that provide major medical, dental, long-term disability, AD&D, or group term life insurance. Funded plans (plans that hold assets in a trust) must file Form 5500 regardless of the number of covered employees.
Entities like church controlled groups and governmental entities (i.e. state, city, town, village, public school districts, etc.) are not subject to ERISA and will not be required to file a Form 5500 even if their plan participation exceeds 100 participants.
So what happens if the employer cannot file on time?
In the event that an employer cannot complete and electronically submit the Form 5500 by the deadline for their plan year, a one-time 2.5 month extension can be requested by submitting IRS Form 5558. The extension deadline for 2018 calendar year plans is 7/31/19. Note: This is the same date as the initial filing deadline.
If the employer fails to file the extension by the filing deadline, there is a penalty of $50 per day for late returns with no penalty maximum, unless the employer uses the Delinquent Filer Voluntary Compliance Program (DFVC). The penalty is assessed per plan number for each plan year.
More information about the DFVC will be available in an upcoming Compliance Buzz article on Late and Missing Form 5500s.
Please see the table below for a full listing of Form 5500 filing deadlines as well as extended deadlines. (Dates in table based on plan years ending on the month-end.)
Form 5558 Completion
A copy of Form 5558 can be obtained on the IRS website http://www.irs.gov/pub/irs-pdf/f5558.pdf
To complete the Form 5558, an employer must fill in the Employer name, address, EIN, Plan Name, Plan Number and Plan ending date, and the requested extension deadline portions of the form (see sample below). This information can be generally found in their Summary Plan Description. The extension request is for a maximum of 2.5 months and is granted automatically as long as the request is postmarked by the original filing deadline. If the employer is requesting an extension for the Form 5500 series, an employer signature is not required.
Although Form 5500 must be filed electronically, Form 5558 (which requests the filing extension) must be submitted via U.S. Mail or Private Delivery Service (DHL Express, Federal Express, and UPS). The mailing address for all extension requests regardless of state of organization or filing deadline is:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0045
The Bottom Line
Some employers may not be able to meet the initial Form 5500 deadline. This may be because they are waiting for data to come from an insurance carrier, the person that needs to sign the Form 5500 is not available to sign the form, or they recently realized that they needed to file a Form 5500 and do not have adequate time to complete the return prior to the deadline. An extension can be filed on or before the original deadline, which will give the employer an extra 2.5 months to file the Form 5500.
Important: Failure to file the Form 5500 by the extension deadline will result in a $50 per day penalty assessment back to the original Form 5500 deadline. For example, if you file Form 5558 and request an extension for your calendar year plan until 10/15/2019 – but you do not file your Form 5500 until 10/20/2019 – the $50 per day penalty assessment will apply back to the initial 7/31/2019 deadline date, not just the 10/15/2019 extension date. The Department of Labor has the authority to assess a penalty of up to $2,194 per day.
Below, please find a table of deadlines for filing Form 5500 (including the deadline with an extension, provided Form 5558 was filed timely).
Form 5500 Preparation Services
Employee Benefits Corporation is able to assist employers with health and welfare plan Form 5500 preparation. This includes Health Care FSA, HRA and other types of Form 5500s (i.e. insured plans, self-funded plans, wrap plans, etc.) upon request from current clients and for those that would like to contract for Compliance Services. Please contact email@example.com for more information.
Sample Form 5558
Below is a sample, completed Form 5558 created for a calendar year plan.